This report continues the work of our predecessors
on the Defence, Foreign Affairs, International Development and
Trade and Industry Committees in the last Parliament. They established
a system for the joint scrutiny of the Government's Annual Reports
on Strategic Export Controls. In this report we focus on the Annual
Report for 2000. We also look in some detail at the implications
of world events since the end of 2000 for the way in which the
export control regime is operated. We draw particular attention
to matters of concern relating to India, Israel and Pakistan.

2000 was the first year of the introduction of the
consolidated national and EU criteria, against which applications
to export strategic goods are judged. We consider the evidence
provided by the Annual Report of the extent to which it appears
that Ministers have applied the Consolidated Criteria fairly and
appropriately. For the most part, we find that they have done
so.

We consider whether the evidence suggests that the
Consolidated Criteria are interpreted and applied consistently,
and whether their terms are sufficiently clear. We give particular
attention to the criteria relating to the preservation of regional
stability, the prevention of the diversion of weapons (including
weapons of mass destruction) to terrorist groups, and the sustainable
development criterion. In relation to the last of these, we draw
some lessons from the controversy over the licence to export an
air traffic control system to Tanzania. We also give some preliminary
consideration to the implications of the Government's announcement
on 8 July 2002 that it had granted licences for the export of
certain components to the USA for incorporation in F-16 aircraft
destined for export to Israel.

We examine the format of the Government's Annual
Report and the usefulness of the information it contains and that
which it fails to include. We make recommendations for increasing
its transparency, particularly in relation to the cumulative effect
of exports to particular destinations, the monitoring of end-use
of exports and data on the identification and value of specific
goods covered by licences. We question, in some cases, the basis
for excluding information from the report on the grounds of confidentiality.
Our concerns also extend to information provided to us which the
Government has asked us not to publish.

We consider the administration of the system of licensing
by the DTI's Export Control Oganisation. Its performance is still
below an acceptable standard. We recommend greater transparency
about the input of individual Departments to the licensing approval
process, particularly in respect of prior approval by the MoD
and consultation with the DfID on sustainable development questions.

We examine the passage of the Export Control Bill
through Parliament in this session. We note its implications for
the future of the export control regime. We note again that much
of the meat of the legislation which will underpin that regime
will be contained in delegated legislation to be made under the
powers given by the Act, and we remind the Government of its commitment
to give sufficient time for our committees to consider that proposed
legislation in draft form. We will also be examining the terms
of the guidance which is proposed to be issued under the Act.

The control of strategic exports is a sensitive area
of Government activity. Transparency in the exercise of that executive
function is essential. So too is parliamentary accountability
for the Government's discharge of that function. We applaud the
Government's progress in establishing a transparent and accountable
system of strategic export controls. However, when we examine
the arguments put forward by the Government to support their rejection
of our predecessors' proposals for prior parliamentary scrutiny
of certain licence applications we find many of them to be either
ill-founded or exaggerated. We recommend that the Government come
forward with proposals for an experimental scheme for prior scrutiny,
so that their concerns can be tested against experience.